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But on Thursday morning, the Goldwater Institute announced it had filed suit to stop the expansion, arguing that state lawmakers violated the Arizona constitution when they passed it in the first place.

Arizona Gov. Jan Brewer is one of a handful of conservative governors who supported Medicaid expansion, but she had to rely on a lot of Democratic support to get it through the Republican-led Legislature, and many in the GOP haven’t given up fighting. If the tea party-backed activists had gotten Medicaid on the ballot for next year, it would have stopped it cold in the meantime.

With that route blocked, the Goldwater Institute stepped in. A spokeswoman confirmed to POLITICO that the institute has sued on behalf of the 36 Republican lawmakers who voted against expansion and believe the Medicaid plan – and the hospital fee that finances it – violates separation of powers.

Goldwater argues that lawmakers violated the state constitution by delegating taxation authority to the Brewer administration.

“If this bill is not stopped, a dangerous precedent will have been set that extends far beyond Medicaid expansion,” said Christina Sandefur, a Goldwater Institute attorney. “Blocking implementation of this law is critical to preserving the democratic protections Arizonans have enshrined in their constitution.”

The Brewer administration intends to impose a fee – opponents call it a tax – on hospitals to fund the state’s share of expansion costs. The federal government is paying for the first three years, and then phases back to 90 percent, with the state filling in the gap. Goldwater contends Brewer and supportive lawmakers masked the tax as a fee in order to skirt a constitutional requirement for a two-thirds vote of the Legislature.

A Brewer spokesman told the Arizona Republic that the hospital fee is valid. “Agencies have routinely been given fee authority, over 80 times in the past five years,” spokesman Andrew Wilder said.

If continued efforts to block expansion fail, eligible enrollees can begin signing up on Oct. 1 for Medicaid or other Obamacare health plans, with coverage slated to take effect on Jan. 1.